What are the different possible consumer reference prices?
What will be an ideal response?
Although consumers have fairly good knowledge of price ranges, surprisingly few can accurately recall specific prices. When examining prices, consumers often employ reference prices, comparing an observed price to an internal reference price they remember or an external frame of reference such as a posted "regular retail price."
These reference prices include:
• fair price — what consumers feels the product should cost
• typical price
• last price paid
• upper-bound price — reservation price or the maximum most consumers would pay
• lower-bound price — lower threshold price or the minimum most consumers would pay
• historical competitor price
• expected future price
• usual discounted price
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Price discrimination is legal when a ________
A) manufacturer and reseller have agreed upon a specified retail price for a product B) manufacturer sells to retailers in different markets C) seller can prove its costs are different when selling to different retailers D) seller advertises prices that are not actually available to consumers E) seller has not communicated with competitors before announcing prices
Which of the following is NOT an advantage of a cafeteria style benefit plan?
(a) reduced administrative costs (b) turnover should theoretically be reduced (c) employees get only the benefits that are important to them (d) employees are most likely to have a clear idea of the cost of benefits